Property settlements can seem a bit daunting when you are facing separation or divorce. What do you need to know to make sure that you and your children are looked after? This article covers the basics of what your options are, as well as how we can help you further.

What is a Property Settlement?

A property settlement is the legal division of the shared property from your relationship. If you are married or in a de-facto relationship then you are entitled to a property settlement when the relationship ends.

A property settlement is a separate legal process from a divorce, and can often occur without a divorce happening, or well before the divorce is finalised.

You need to be separated from your partner for 12 months to seek a legal divorce, which is the dissolution of the marriage contract, and allows either party to remarry.

Can we separate without a property settlement? And can we do this without getting lawyers involved?

You can separate and divide the property (and also agree on parenting arrangements) without lawyers involved. You can make informal arrangements between you and your partner, however it is important to note that these kinds of arrangements are not legally binding.

If communication or keeping up these informal arrangements breaks down at some stage later, you might struggle to get legal support to enforce them.

Types of Legally Binding Property Settlements

Consent Orders

If you and your partner can agree amicably about how the property will be divided, the process is simpler, but still needs to involve the legal step of Consent Orders, to make sure that your rights and responsibilities are being met. 

A consent order is a legally binding agreement that outlines the terms of the settlement and that is signed off on by the court. It is enforceable if either party doesn’t adhere to the division as it was agreed. You apply directly to the Family Court of Australia to do this (or your lawyer can help).

Financial Agreement

You could also seek a Binding Financial Agreement, which is a document arranged with each party represented by separate lawyers, to ensure that both parties best interests are being met. 

You don’t need to go through the court to make a financial agreement legally binding, but you must both get independent legal advice when going through this process.

If you can’t agree on the division of property, how do you reach a property settlement?

If you and your partner can’t agree on the division of property, you may need to negotiate a settlement with the use of lawyers. 

This may or may not involve you attending court - if the matter can be agreed to through communication and processes like mediation then the court may not need to get involved. 

What if we have to go to court?

If you can’t agree on the division of property, you will need to file in court for a property settlement. The court will then consider the following steps: 

1. Identifying the assets, liabilities and resources of each party to the relationship
2. Assessing the contributions, both financial and practical (including caregiving and wellbeing related) of each party to the relationship
3. Assessing the future needs of both of the parties (including your capacity to earn and support yourself and who will be looking after the children)
4. Working out a fair distribution of the assets between the two parties.

How will the property be divided?

The division of property in the settlement will depend on a few factors, including how long you have been married, if there are children and who will care for them, and how much you both brought to the marriage. 

If the relationship has been long and the contribution of both parties fairly even across the years, then the property will likely be evenly divided.

If one party has significantly contributed more than the other (such as by owning property prior to the marriage or gaining money through an inheritance) or one party has caused a significant loss of the couple’s money, then the court may order a division in which one party receives an appropriate adjustment to reflect this.

What will happen to my home?

This is often the biggest worry when a couple separates. A home that you bought together may be more than you can afford following your separation.

The value of the property has to be agreed to, which may involve getting a valuation of the family home.

If you have a mortgage in both names, legally you are both still responsible for making sure the mortgage is paid. A property settlement usually means that one party takes ownership of the home and buys the other party out, or the home may need to be sold and the proceeds distributed between the parties.

When should I talk to a family lawyer?

It is never too soon to talk to a family lawyer about what will happen to your property following your separation. If you are thinking of separating from your partner, it is a very good idea to talk to a lawyer first. 

Even if you are separating on good terms, speaking to a lawyer as soon as you can will help to get the best assessment of what property you own and what you are entitled to. You may need assistance to stop property from being sold before it can be divided, or to look into income or assets that your partner hasn’t disclosed.

 

We can help you achieve clarity on your rights and responsibilities and avoid the uncertainty a separation can give rise to. Give us a call today to find out more about your options.